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The corporation as a form of business organization

On Behalf of | May 4, 2017 | Closely Held Businesses |

After months or perhaps even years of planning, it is time — time to dive in and join hundreds of thousands of entrepreneurs across Ohio. The concept is sound and the opportunity for a new business startup seems right. Perhaps one of the only remaining decisions is what type of business organization to form.

For many business owners, a corporation is the appropriate choice. There are many reasons for this. First, a corporation affords the individual a limited liability. The corporation is a separate entity from the individual; therefore, its debts and business undertakings are considered to be separate from the individual. A corporation also has a very specific management structure and as such is often more readily able to attract investors and stockholders.

Corporations can also offer an attraction to potential employees. Many times, as a corporation grows, it is able to offer stock options and incentives to its employees. This can be an attractive benefit.

As with any type of business organization, there are also negative aspects to corporations. For one thing, it takes time and money to form a corporation. Forms must be completed and filed and a number of formalities specific to corporations must be addressed. Additionally, it is also possible that the corporation’s profits can be taxed twice. When this happens, the corporation pays taxes on its profits and the stockholder pays taxes on his or her dividends.

The type of business organization that the Ohio entrepreneur decides upon ultimately depends upon the type and size of the business as well as the individual’s goals. For many, a corporation makes the most sense. An experienced attorney can help one analyze the options available and  help decide which form is the most appealing.

Source:, “Pros and Cons: Why Form a Corporation?“, Accessed on May 3, 2017


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